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Post of the Day
July 8, 1999

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Subject: Re: Benefit of the doubt -- for now
Author: Absynthe

"the dying days of the Internet Gold Rush"

"are you serious?"

Honestly? No.

I believe quite firmly that, until the public gets a better understanding of the Internet and how it affects businesses, the Internet Gold Rush will be going on for a while. Lots of people searching unsuccessfully for the Next Big Thing, losing money in toilet-cleaning companies that get IPOs when they announce that they will become the 1st toilet-cleaning company to incorporate the Internet into their business plan.

Example? I sat on an airplane for two hours, listening to this grandmother talk about all the great things that the Internet can do, when it became obvious after ten minutes that she hadn't the faintest idea what she was saying. It didn't help matters when she told me that she was an initial investor in www.quixtar.com. She said she threw her entire savings into their startup. Biting my tongue was all I could do to keep from crying.

Companies and investors seem to be throwing themselves headfirst into the Internet without thinking how said plan could bite them in the bum, either through lost revenues or no increased income potential. Is that necessarily a problem? No, not really. The good will out, same as it ever was, and the band played on. (Did I miss a metaphor there?) Back in the day, Starbucks made a decent cuppa joe. Now they want to be a high-falutin' Walgreens, just over the Web. You tell me if that's a good thing. Better yet, ask Walgreens.

No, the Internet Gold Rush is in full swing. Guess I was just *hoping* for a quick return to the senses. There is a ton of potential for companies to increase their margins via new technology; there's a much greater chance, however, that through inept management, lack of demand, or just plain old bad luck, many more companies will lose money the same way. It's another way to view the world. It's not a Wave of the Future, a Zeitgeist, or a Metaphor of the Week. It's a bunch of computers relaying information. Sometimes people sell stuff over it. It's misunderstood by a great number of people.

And if the Internet can do one thing well, it is this: nothing will expose a company's business practices faster. No vision, bad vision, no leadership, over-diversification, lack of customer consideration, all-out hubris... I can't count the number of incredibly bad corporate Web pages. It's as if these companies considered the customer as a mere afterthought, a means to an end, looking at some of these pages. It takes a great deal of thought in order to create a cohesive Web site -- lots of fresh content, the right mix of flash and speed, and accessibility -- and not a whole lotta companies do it. Starbucks' is borderline at best, which doesn't give me much faith.

So in closing: is the IGR finished? Nope. As long as there are people with a dream of getting rich faster without understanding what it takes to generate wealth, there will be companies that insist on spending $35 a year for the domain name nailfungus.com. There will be silver-haired ladies throwing life savings into startup companies. And there will be one born every minute.

But hopefully, with each passing day, we're getting wiser, and we're realising that the Internet is no substitute for a decent business model, and we're investing in companies that utilise the Internet in innovative and profitable ways.

Go ahead. Damn me for being a starry-eyed waif.

Starry-eyed waif,
Absynthe